June 2007

What is driving the iPhone hype?

At this point, I don’t think anybody could live up to the incredible hype the iPhone has received, even Jesus. But the more interesting question is:

What is driving this unprecedented hype?

Steve Jobs is a master salesman. But what has really fueled the iPhone hype is the success of the iPod.

iPod is the most revolutionary product of the 21st century; it built the digital music category and dominates it with 70% of the market. 100 million iPods have been sold and iTunes has sold over 2.5 billion songs.

The hype and intense media, consumer and Wall Street excitement comes from the impression that the iPhone will become another iPod (it even has a similar name.) And that Jobs will do in phones (a market 4 times the size of music players) what he did in music. In other words, he came, he saw, he conquered.

Nothing could be further from the truth. If the iPod is the biggest success of the 21st century then iPhone is likely to be the biggest flop of the 21st century.

The problem stems from the fact that the iPod and the iPhone are drastically different products despite the similar name.

The iPod is a divergence product. It does one thing extremely well: plays music.

iPod was the first hard-drive music player in the mind. It could hold thousands of songs versus all the other MP3 players that could only a couple of CDs. iPod was different, unique and brilliant. It also took off slowly. Initial reaction was lukewarm at best.

But truly revolutionary ideas always take off slowly. People don’t change overnight. It has taken years for photography to go digital, or for people to fuel up with Red Bull or Starbucks.

Smaller companies are actually more successful at building new categories because they have the determination and patience to focus and use PR instead of advertising. On the other hand, big companies usually ignore these small markets until it is too late to get in.

Red Bull was on the market for 13 years before Coca-Cola introduced its own energy drink, a me-too product called KMX which fizzled quickly. It took Red Bull over ten years to reach $100 million but last year it was a $3.4 billion dollar business.

The iPhone is the opposite of the iPod. The iPhone is a convergence product. It tires to combine multiple functions into one device. It is also nothing new. There have been many convergence devices in the past and all have been failures. Including: ROKR, N-Gage and the Nokia Communicator.

Convergence means compromise

Convergence products capture the imagination of the media and public but the devices can never deliver on their promise of nirvana because all convergence devices are doomed by compromise.

In order to produce an all-in-one device, the device has to make compromises: battery life is short, the device is difficult to use, it is too large and it is too expensive.

The iPhone will likely have problems with all these things. If you are watching movies, surfing the internet, checking email, listening to music and making phone calls, how long do you think even the best battery could last?

The most troubling aspect of the iPhone is the touch screen keyboard. The touch screen is a compromise in order to have the screen as large as possible. In general, people like to feel a keyboard and the technology is complex. Even Jobs admits it will take people time to get used to it.

It is also worrisome that no one has really been able to try it yet (could there be problems?) Talk is that the product was rushed to market and announced at MacWorld before it was actually debugged and ready.

The touch screen is not like the click-wheel on the iPod. The click-wheel made using the iPod easier and simpler. The touch screen will make using the iPhone more difficult.

Remember the Newton?

The iPhone reminds me of another over-hyped Apple convergence product: The Newton from 1993. The product was launched after the success of the Macintosh and received enormous hype.

John Sculley called it a complete reinvention of personal computing. The key function being its handwriting recognition technology.

But the handwriting recognition had major problems from the start. News story after story told of the funny and mistaken translations the device made.

I think the iPhone could face the same problem, as consumers have difficulty with the touch-screen keyboard. Hitting one key to play a song is one thing, typing out multiple emails on a touch-screen is another. I have enough trouble getting money out of the ATM with a touch screen. I don’t think consumers will necessarily welcome this technology for a keyboard.

The iPhone ad campaign

At this point massive advertising for the iPhone is not only unnecessary but looks desperate. Why does Apple have to advertise a product that is not available yet and already has widespread recognition? Perhaps Apple is nervous?

The ads themselves are not simple or elegant. They look like a desperate attempt to try and justify the hype and explain the product. All the product demonstration in the ad does is to show how truly complex the iPhone is. Not a good thing. Simplicity sells. Complexity scares.

The iPod advertising is perhaps one of the greatest ad campaigns of all time. The simplicity of showing the white ear buds and the “iPod” name is pure brilliance. It does what great advertising should do: Reinforces the brand in the mind.

Apple has brought us many revolutionary products over the years from the Apple II to the Macintosh to the iPod. Unfortunately, I don’t think the iPhone will be one of them.

"Smartphones have not been an overwhelming success. They have less than 10% of the market, despite the hype."

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Smartphones, for the most part, have not been targeted at consumers. They are targeted to business users. You don't see many high school kids with Blackberries or Treos.

It remains to be seen whether the high price of the iPhone will go over well with consumers, but it would be hard to argue that the iPhone isn't targeted at a different market than existing smartphones.

Apple could probably care less about existing smartphone users. Sure they're making a few nods to those users (Exchange integration, etc) but the iPhone is a consumer device, through and through. And so I don't think comparing it to the low market share of smartphones is really that apt. Smartphones have never been targeted at consumers before.

Cellphones have been on a convergence path for years now. 15 years ago a cell phone made and received calls. Now it's basically impossible to get one without a camera, and without the ability to send text messages as well as voice messages. The device has converged with simple cameras, and added additional features such as text messaging. While there are many individuals who wish their cellphones just made great calls, it would be hard to argue that the addition of new features beyond the basics of making phone calls haven't been wildly popular with consumers.

Sure, the full-featured smartphone level of convergence has yet to really catch on with consumers. But that's due in large part to the poor implementations of the concept to date.

It's not convergence itself that leads to a poor user experience, or a bad product. It's the implementation of additional features to something without regard for how those additions affect the whole.

A company like Apple spends copious amounts of time and energy making the whole greater than the sum of its parts. And that is exactly the type of situation where convergent devices shine.

Yes, there will be compromises made and an iPhone will never handle features X,Y or Z as well as a dedicated X, Y or Z. But I have greater faith in Apple's ability to make a product that appeals to the masses and works great for 90% of people than any other cellphone company to date.

As for your claim that PR has usurped advertising, I haven't read your book so I can't really comment on that. Certainly I believe that PR has increased importance these days in the success of a product or brand, but I don't see the harm in promoting your product through both channels.

I still completely disagree that the iPhone ads are detrimental to the product in any way. I think they've created a level of excitement about the experience that couldn't be duplicated through PR and couldn't be matched by a "traditional" cellphone ad campaign.

Only time will tell whether the iPhone will be a hit or not, but I think Apple has shown before that the conventional wisdom doesn't always hold true.

i had a large point-by-point response, but i think i can be far more succinct: it'll be 6-12 months before you own an iphone and this post will be conveniently forgotten. i hope you'll at least have the stones to admit you were wrong.

daringfireball readers are certainly in love with the iPhone. And they should be since they are Apple Addicts.

My opinions and that of my partner (Al Ries) are not limited to just the iPhone. We have talked about the problems of convergence for years. Since 1993 in fact, when Al had an article published in the New York Times.

The whole theory is outlined in our book The Origin of Brands published in 2004. http://www.ries.com/books-booklist-book1.php

What all of the commenters missed in my article is that I said a lot of positive things about Apple, iPod and iPod advertising.

I also wrote a book called The Rise of PR and the Fall of Advertising.

It states that brands don't need advertising to get into the mind, in fact they are better off without it. Apple doesn't need the ads. They have plenty of PR already.

Smartphones have not been an overwhelming success. They have less than 10% of the market, despite the hype.

To do multiple things there is always compromise. It is a fact of life. Yes, Apple made the best, most fantastic smartphone ever. But are smartphones or multiple devices the future. Only time will tell.

"The ads themselves are not simple or elegant. They look like a desperate attempt to try and justify the hype and explain the product. All the product demonstration in the ad does is to show how truly complex the iPhone is. Not a good thing. Simplicity sells. Complexity scares."

You're so far off base here that it's a wonder people pay you for your opinions in this arena. The iPhone ads are brilliant because they buck the conventional wisdom of "experts" like you (don't show too much, you'll scare off the consumer) and treat the advertising of the phone differently than any phone advertising before - just like the iPhone works differently than any phone before.

Sure, people are excited about the way the iPhone looks, but so many more are excited about the way it works. The iPhone makes sense in a way that no other cellphone ever has before. Sure, it's convergent. Sure, it's a novel approach. But it's also something that resonates with people. And the ads foster that with increasing fervor.

Consumers are sick of cellphones. For every one power user who has all their contacts/appointments/data with them and organized, there are 100 more who can't figure out how to change their ringtone or set the phone to vibrate. It's not that people are stupid, it's that cellphones are like the bastard children of the UI world. They're a seemingly endless maze of menus and submenus, usually arranged in less-than-intuitive ways. Even intelligent people can spend days initially figuring out how to solve simple tasks on a typical phone.

So along comes the iPhone. And yes, it is sexy and made by Apple and hailed as the greatest thing since sliced bread. But it also works unlike anything people have ever seen before. And the more people see that functionality in action, the more intrigued they become. So suddenly, showing 30 seconds of using the phone isn't boring or scary or complex. It's captivating and liberating because people understand what makes the iPhone different. They get the feeling that the iPhone is effortless. These iPhone ads don't just make people desire the object (as a typical cellphone maker would shoot for), they make people desire the experience of using it. That's the brilliance of the ads.

You said it yourself, "Simplicity sells. Complexity scares." If you want to see scary, imagine a 30-second Motorola spot showing someone browsing the functions of a RAZR. These iPhone ads are brilliant, effective and simple.

Hilarious. All this from someone who hasn't even held an iPhone in their hands and admits "I have enough trouble getting money out of the ATM with a touch screen." I'm surprised you've made it through life this far, but having seen the demos I'm sure even you could operate an iPhone.

"The ads themselves are not simple or elegant. They look like a desperate attempt to try and justify the hype and explain the product." You have no taste - of course the ads are simple and elegant. You're not too bright - they're the only phone ads ever to show you exactly how the product works. Advertise what a product does? Wow, that's really deep! It's an entirely reasonable marketing line to take given iPhone is sufficiently different to what people have had to endure to date. Love him or loathe him, the last 6 months has been a marketing masterclass by Steve Jobs - he's got maximum bang for his buck.

Any mobile device is going to have compromises and trade-offs, just as the internet is littered with 'journalists' and bloggers who think they really know something; it comes with the territory. iPhone looks like it has broken new ground having fewer or less significant compromises than current alternatives. The iPhone is the worst phone Apple will make -- they will only get better from here on in, and the compromises smaller. However, it'll be interesting to see in 5-10 years time whether thinkers (or should that be the hard-of-thinking) like yourself will write off the next hyped product because it's not a convergent device like the iPhone is.

"Why does Apple have to advertise a product that is not available yet and already has widespread recognition? Perhaps Apple is nervous?

The ads themselves are not simple or elegant. They look like a desperate attempt to try and justify the hype and explain the product. All the product demonstration in the ad does is to show how truly complex the iPhone is. Not a good thing. Simplicity sells. Complexity scares."

Oh dear. This has to be the lamest conclusion I've heard on this point.

Let me ask the other way around: When did you EVER see a gadget being marketed with the actual use of the product, and not just hype?

Watch ANY mobilephone ad, and you see beautiful woman sitting in expensive cars talking, you see handsome guys cutting deals surrounded by just as handsome men. Or cool kids skateboarding or jogging with their phones.

Apple shows you how it works, because they know that's the winning point of the iPhone: The simplicity.

The CEO of Wrigley's (the gum) was asked why they spent a fortune on marketing every year? They were the market leader, so why bother?

He answered something like this "Do you take away the locomotive when the train is up to speed?"

Of course not.

You're of course free to think the iPhone will flop, but your arguments on why are just silly.

And, no. I haven't touched or tried it either. A week now, and we have the answer.

Further to that fact that it's about the software, this quote from Steve Jobs in the Walt Mossberg interview:

Steve: We don’t talk about future products. I will say that the iPhone is the most sophisticated software platform ever created for a mobile device, and that we think software features are where the action will be in the coming years. Stay tuned.

I can't believe that you would want to put your name to an article so chock full of oversimplifications and poorly informed conjecture. Let me keep my comments simple:

"In order to produce an all-in-one device, the device has to make compromises: battery life is short, the device is difficult to use, it is too large and it is too expensive...The most troubling aspect of the iPhone is the touch screen keyboard. The touch screen is a compromise in order to have the screen as large as possible. In general, people like to feel a keyboard and the technology is complex."
First, as you've admitted, you can't know any of the above to be true since you've never seen or tried an iPhone. And every review on the iPhone so far (there have been 4 legitimate hands on reviews that I know of) have refuted your allegations. How about we wait and see about the battery life, the user interface, the virtual keyboard, etc before we write the device off?
"At this point massive advertising for the iPhone is not only unnecessary but looks desperate. Why does Apple have to advertise a product that is not available yet and already has widespread recognition?"

I cannot believe that a person who holds themselves out as an expert in branding asked that question. They shouldn't advertise the product until it is available? Un. Be. Lievable

It's NOT about the DEVICE. It's about the SOFTWARE. Have you seen the UI on this thing? NO MENUS. No goofing around. Is it a phone? Yes. Does it have killer features for a phone? From a hardware perspective maybe not, but from a phone user's perspective it's just fantastic. Is it a camera? Sure maybe not the best, but it's got camera. What makes it a good camera? Not the lens. It's the great software to use the camera that make it a camera. Is it an iPod? Yes. Is it better than an iPod? Maybe not in terms of hardware, but try to access your music more easily using any other phone. Yes it's a great phone with iPod functionality.

The UI is the iPhone's most compelling and distinctive feature. That it has other features and capabilities is nice. But it's not that it's "Apple's mobile phone" that make it so great compared to any others. It's that its software makes it stupidly simple and awesomely fun to use. THAT'S what makes it great. Just like the Mac: it's the software. It's the UI. Chant these words over and over to get enlightenment: Software. UI. Software. UI. Software. UI. Software. UI...

It'll fail because it's a convergent device. Right. Following that (flawed) logic, all convergent devices in the mobile phone market should fail; all the cameraphones and smartphones and whatnot.

Which of course, they haven't.

Question: was this article written as an analyst with an understanding of the market, or on the offchance that the iPhone will fail and you'll be able to jump up and down shouting "See! I was right!" ?

Unfortunately, I disagree with you that it will flop. If it does then you are truly a marketing guru and deserve your status. However, if it doesn't which by doesn't I mean it will grab more than 10% of the smartphone market, then you should at least acknowledge your lack of foresight on this blog.

I agree with some of you that people will love their iPhones, but that's a certain type of people (not majority), and they just won't add up to a significant share of the market that could be considered 'success'.

Imagine the negative word-of-mouth when this happens? And who will want an iPhone after being labeled 'disappointment'?

The psychological advantage of being a 'specialist' is just to powerful, even if iPhone performed pretty good at all its functions (which it won't).

Even though this a rally of brand-tennis that won't end until we have a couple of years of iPhone sales data, here's my next return to you Laura.."boing!"..

This from Which? Reports in the UK:

"Seven million Britons want to snap up an Apple iPhone when it’s finally released in the UK later this year accordinh to a survey from mobile market authority M:Metrics".

I think where you are mistaken is in thinking too much...people have an emotional, not rational, reaction to wow Aple products like the iPod, Mac Book and ,yes, iPhone. They just WANT one, and don't even think about divergence/convergence.

Now, where you do have a point is that if the user experience is as crap as the Newton, then they are in trouble...success or failure will depend on word-of-mouth. But if Jobs and Ive have worked their magic again, which it looks like they have, then it will be a huge hit.

The iPhone hype is totally coming from the iPod. iPod is like Kleenex, Xerox, or Google. The brand has become the category.

The iPhone is just another do-it-all mobile phone. I do use my Blackberry to make phone calls, but I also have a slim and sleek cell phone for those times when I don't feel like lugging the huge thing around. I also have an iPod and I even have an iPod Shuffle for when I run. All of these things serve a specialized purose and do it well. There is so way I would take the $500 iPhone jogging, but the $79 shuffle is cheap enough that I don't worry too much about breaking it.

For me mobile phones are not anchor devices, not yet anyways.

Also, my PC is a versatile machine, it even claims to be a "Media Center", but it hasn't replaced my TV, Tivo, and DVD player yet. It's just too complex to try and fit all those functions into one device.

RAZR is a "better" phone. BlackBerry is a "better" email device. DS is a "better" game player. Garmin is a "better" mapping device. iPod is a "better" music device.

These are all "better" in the mind because they are category leaders and pioneers. The devices are focused and built specifically for the task.

My iPod shuffle needs to be tiny so I can run with it. My BlackBerry needs to be big enough so I can type comforably. A little of one combined with a little of the other and you get a device that perform poorly at both. Or trapped in the mushy middle.

The question is will consumers be willing to compromise on battery life, size, price and easy of use to get an all-in-one device that doesn't perform better than the sum of its parts?

Sure, a few people will for the sake of convenience. But the vast majority of people won't be able to give up on their "better" devices.

Don't be fooled: Despite the hype, the deals and the massive advertising smart phones still only have 8 percent of the market.

Anchor device? The computer industry has been flat. The media center PC flopped miserably. The TV/PC crashed and burned. And Interactive TV was humiliated.

Opportunity comes from pulling things apart not putting them together.